A Work Project, presented as part of the requirements for the Award of a Master’s Degree in Management from the NOVA – School of Business and Economics. LOGOPLASTE: CONQUERING THE WORLD ONE BOTTLE AT A TIME Matilde Madeira Moreira da Cruz 1914 A Project carried out under the supervision of Professor Alexandre Dias da Cunha January 8th, 2016
31
Embed
LOGOPLASTE: CONQUERING THE WORLD ONE BOTTLE AT … · 2 ABSTRACT The “Logoplaste: Conquering the world one bottle at a time” case is based on the real story of the Botton family
This document is posted to help you gain knowledge. Please leave a comment to let me know what you think about it! Share it to your friends and learn new things together.
Transcript
A Work Project, presented as part of the requirements for the Award of a Master’s Degree in
Management from the NOVA – School of Business and Economics.
LOGOPLASTE:
CONQUERING THE WORLD ONE BOTTLE AT A TIME
Matilde Madeira Moreira da Cruz
1914
A Project carried out under the supervision of Professor Alexandre Dias da Cunha
January 8th, 2016
1
ACKNOWLEDGEMENTS
Foremost, I would like to express my sincere gratitude to my advisor Professor Alexandre
Dias da Cunha for the continuous support on my Master Thesis, for his motivation,
enthusiasm, and knowledge in this field. His guidance, expertise and availability were
essential throughout the entire path of research and writing this thesis. Moreover, it was his
true passion in the field of Family Business that played an important role in my interest and
decision to develop a case study in this field for the final Work Project.
My sincere thanks also go to Filipe de Botton, Alexandre Relvas and Marta de Botton, for
providing me key insights as well as being partners in this project. Thank you for your
kindness and help. I owe the accuracy and quality of the information in this case study to you
and all the team members who helped me throughout this project.
Finally, I would like to take the opportunity to thank my family and friends for their
continuous support. A special acknowledgement to my parents who made it possible for me to
embrace the challenge of completing this Master’s program, and whose unconditional love
and support made it easier to overcome every obstacle and keep focused on my academic
path.
Thank you all,
Matilde Cruz
2
ABSTRACT
The “Logoplaste: Conquering the world one bottle at a time” case is based on the real story of
the Botton family and their journey to build the globally known company Logoplaste. Famous
for its “hole in the wall” strategy within the plastics industry, Logoplaste is not only one of
the major plastic bottles manufacturers in the world, but also a company which has been
proving us that a shared leadership system can be successful within a family business. This
case intendeds to demonstrate the dynamics of a family business, illustrating the complexity
of the decision making process and how they have successfully mastered dual management in
a family firm. Moreover, it also aims to demonstrate that a family firm can be managed in
such way that sustainable growth, as a key pillar, can be enabled through a strong focus on
internationalization and innovation. A teaching note is available at the end of the case in order
to guide students and teachers in their readings. Discussions questions, for debate in class
environment, are also provided together with suggested answers drawn together to increase
the critical sense and theoretical application of the themes studied in class.
Family Business
Succession
Agency and Resource Based View Theories
Shared Leadership
3
LOGOPLASTE: CONQUERING THE WORLD ONE BOTTLE AT A TIME
PART I
“In 1996, in a warm winter afternoon Filipe is driving his car, lost in thoughts about his
father’s business. Questions rush through his mind, how to make the business grow, break
international barriers, become a benchmark in innovation for the global plastics industry? A
strange feeling streams through his body, after all he is not at all comfortable to picture
himself alone in this position. But, who could be the right person to go along him in this big
adventure? Should he rely on his family members or, on the other side, follow his instinct and
share company’s management with a former college colleague and family friend…”
“A BOTTLE IS BORN”1
The Second World War was at its climax. Poland, Norway, Belgium, Denmark and
Netherlands had already been conquered by the German army. France was the next country in
the line to be occupied by the Nazi troupes. In 1940 tanks broke through the French defensive
lines and Paris was at last conquered by the Germans.
In 1943 Marcel de Botton, a young French-man aspiring to be a doctor, escapes the Nazi
regime, along with his family (mother and father), and rushes to build a new and better life.
Portugal was the chosen country. What Marcel did not know was that his long-time dream of
helping people through his Medicine had its days numbered. After all, the Portuguese
University did not accept as equivalent any medical studies he had done in France. Marcel
was faced with two options to support his family with low financial resources: begin the
medicine course all over again or start working on a different field. As a very disciplined and
focused young man, he decided to start working right away with his dad in a glass ampoules
factory, where he worked till 1958.
1https://www.youtube.com/watch?v=f_f132bE2uw – “Logoplaste bottle is born” video.
4
In 1958, Marcel founded his first business, Titan, a plastic factory, pioneer in the construction
of PVC packaging for drugs. However, it was not long till Marcel had to face, once again, the
impact of a revolution. Back in 1974, Portugal was fighting its way out of a dictatorial regime,
named Estado Novo, and struggling to establish a new democratic society, under strong
socialist orientation. During this period several factories and companies were occupied and
captured by its workers, who demanded better working conditions and stakes in the firms.
Titan was not an exception, and soon Marcel figured out it would be impossible to manage the
company under this circumstance. For once more he was put to the test, having to find out a
way to overcome this situation, with a major problem to solve: he had to find a way to control
the company without risking losing it once again.
The answer to this dilemma came quickly and led to what would become a success beyond
any expectations: the idea would be build small plastic factories inside its clients’ facilities. If
a revolution stroked again, the probability of him losing everything, when having smaller
factories, decreased. A simple, fast and totally innovative concept of industrial management
was created – the “hole in the wall” strategy.2 The concepts of just-in-time, nearby and
integration of supply chains were not common at the time, aside Japanese and American
factories, but its use in the Portuguese plastics industry was clearly an innovation, one that
proved to be a victory.
Although his father always said: “My son, there will be no place for the plastic industry in the
future!”, Marcel decided to devote his body and soul to "the non-future: plastics”.3
Logoplaste was built under this new strategy with two factories. The first one was connected
to Yoplait in the north of Portugal, manufacturing yogurt bottles. The second factory was
connected to Nestlé and produced covers for Nescafé bottles.
2 To learn more about this concept consult the optional readings presented at the end of the case.
3 (Costa, A. 2013)
5
THE NEXT GENERATION
Filipe de Botton joined the company in 1976 as an assistant to his father. At the time, Filipe
was still studying and used his financial knowledge to support the company, mainly by filling
grant request forms to raise further investment in the industry. He also had a role in the
commercial department, visiting new clients from time to time, namely from the
pharmaceutical industry which needed packaging for their products.
His relationship with Logoplaste started way before at home, where he continuously heard his
father talking about company matters. Filipe walked down Logoplaste’s (formerly named
Titan) hallways since he was a little boy, building a strong emotional bond with the company
since its early days. At his boyhood, during summer holidays, he worked at the factories,
performing different tasks, from helping in the mold workshop to overseeing the machinery,
always in shifts.
Although Marcel, his father, drove every day to the same factory where Filipe was working,
he never gave him a ride. This was his way to teach him how hard was working life, just like
any other employee he had to wake up early to catch the morning train every day.
In 1976, while working at Logoplaste, Filipe also had the opportunity to represent a French
bank in Portugal. To face this new challenge, he later on invited his former college friend
Alexandre Relvas. Together, they acquired the representation of different banks in Portugal
and decided to found Interfinança, a financial company focused on asset management. In
1991, Alexandre was invited to join the government, having to leave Filipe managing their
company on his own.
Filipe’s working relationship with Logoplaste matured, and in the 90’s he already had an
important role in the financial matters of the company and was deeply involved with all
business related decisions.
6
With the exit of Alexandre, Filipe decided to sell out their asset management company,
earning some capital from this transaction. The moment when Filipe had to choose whether to
invest the outcome on his own business or in his family’s business had arrived. Moreover,
Filipe also had to choose if he wanted to pursue a career in the financial sector, a totally
different industry than his family’s business (he had the opportunity to open a Private Bank
with UBS in Portugal) or devoting his time and effort into Logoplaste expansion.
Filipe chose to invest the money on the family business, the one that he grew up with.
Although having a strong family unity and a good relationship with his sisters (Exhibit I),
Filipe decided to talk with his father about the opportunity to buy a participation in the
company, so that his sisters did not felt that there was some unfairness with the running of the
business. None of his sisters ever had a strong link to the company - the younger one was
taking care of her children and the older one worked for a few years in the company but had
no interest in pursuing a career in that field. However, both sisters and their families were
always present in the company celebrations and important milestones.
Marcel de Botton decided that it was time for the company to have a new leader, and thought
it was the right opportunity to move the business onward to a new generation, giving Filipe
the chance to fill his shoes on the company. With already 65 years old, 14 of them spent
working on Logoplaste, Marcel decided it was time to step back and transfer the decision
power to Filipe, assuming the position of chairman. At the age of 34, Filipe becomes
Logoplaste’s CEO, assuming all the responsibilities related to the company.
LOGOPLASTE EXPANSION
In 1992, after one year leading Logoplaste, Filipe felt the company was capable of doing
more, and operating just in Portugal was not enough. He decided that it was time for
Logoplaste to explore new markets, outside Portuguese barriers. The decision to
7
internationalize was a bold one: Filipe was a young CEO, with limited experience regarding
internationalization of a company. However, he had a strong vision about Logoplaste’s future,
and was counting on his deep knowledge and emotional ties to the company to serve as
guidance for his decisions.
He decided to start with the “neighbor” country, Spain, a logical choice since it is the only
country that shares physical borders with Portugal. However, even though all the effort and
commitment, after a couple of years, the Spanish market was not yet delivering the expected
outcome. The lessons learnt from this first experience proved to be valuable along the way, as
Filipe begun to exploring new markets.
One day, Marcel approached Filipe asking him to travel on his behalf to an international
plastics’ confederation in Brazil. Filipe saw this as an opportunity to explore the Brazilian
market, and scheduled five meetings to occur during the week he would be present at this
event with Bombril, Colgate, Reckitt Benckiser, Nestlé and Danone. With these meetings
Filipe expected to learn more about the plastics’ market in Brazil, and all the contingencies
involved in working in this market with these top companies.
At the time Danone Brazil was dealing with major quality issues with their plastic supplier.
Filipe used his social skills and persuasion to find a way to have a conversation with
Danone’s purchasing director who revealed that on the following day Danone’s board of
directors would have a meeting to discuss this problem. They were considering two options –
buying the suppliers’ factory and manage themselves the production site or finding another
supplier that would meet their high quality standards.
Filipe had less than 24 hours to present a serious and reliable proposal highlighting the
benefits of having Logoplaste as a partner and supplier. At the time communication resources
were scarce, so Filipe had to build a proposal out of his knowledge and what he had on mind
8
only. This proposal had to meet two criteria, be in line with Logoplaste’s capacity and meet
Danone’s standards. By having a deep connection with the company, Filipe already had two
persons in mind who could help him make this business possible. All the time he had spent
working in the financial department proved to be very helpful in order to be able to weight the
resources needed to invest in this new production site.
On the morning of October 5th,
in a daring move, and confident that Logoplaste was able to
respond to this new challenge, Filipe sent the proposal to Danone´s directors. A few hours
later Filipe received the good news: Logoplaste had just won a new factory facility in Brazil,
all this in less than 24 hours.
In 1993 Logoplaste signed another contract in Brazil, the industry in Spain was gaining
maturity and the business in Portugal was growing positively. The internationalization helped
Logoplaste to build its reputation in Portugal, gaining more contracts and increasing
confidence of more companies in its services. Logoplaste was achieving a significant role in
the Portuguese market, growing from 8 to 12 million € in global sales. Nonetheless, Filipe
was still not completely satisfied. For him, it was time to explore Europe as ground for his
big next internationalization move.
THE FAMILY FIRM’S FUTURE
With such rapid growth, quickly came the need for Filipe to have a managing team reporting
to him. Without it, he would not be able to become a stable and strong player at the global
plastic market. At a first thought, Filipe knew the right person to join him on this big
adventure was Alexandre, his close friend and longtime business partner.
However this decision raised several questions. Would his family accept bringing an outsider
to Logoplaste? Would Logoplaste’s strong family heritage and culture prevail with a non-
family member leading important business decisions? Would Alexandre be aligned with
9
Filipe’s vision? Or should Filipe think of a capable family member to join him in the
management of the company instead?
The decision eventually came through.With a strong proposal in mind and preparing his best
persuasion lines, Filipe headed to convince his friend to accept the offer and come to build the
Logoplaste that he dreamed of. What would it take for Alexandre to accept?
Filipe had to think carefully on how to approach his friend, creating a proposal with value,
taking into account not only the development of the company, but also Alexandre’s personal
development.
Nonetheless, Filipe was still wondering if his father was in accordance with this situation and
if he would have his support towards the family when he had to present them with his
choice...
EXHIBITS PART I
Exhibit I Botton Family’s Genogram (90’s)
Source: Created by case writer
10
PART II
“TWO IN A BOX4”
In 1997 Alexandre entered the company, sharing Logoplaste’s management and ownership.
Along with Filipe, Alexandre assumed the role of CEO, making Logoplaste one of the few
global companies managed by two CEO’s at the same time.5
Marcel supported his son’s decision, as he has always been aware of the choices and vision
that both have for the company. From the first day, Marcel dealt with both Filipe and
Alexandre as equal allies, deeply trusting on both. Alexandre as always been seen by the
entire family as Marcel’s fourth child, and everyone in the family has this feeling towards
him. Alexandre is one of them.
Alexandre and Filipe have always worked very well together. Their working dynamic is
unmatched since college times, as they fully trust each other’s decisions and beliefs. Both
have confidence and respect on each other’s decisions, and do not contradict or change the
others verdict. When the two CEO’s disagree they respect each other’s point of view and
work together towards a decision that is best for the business and both stand for.
Even though they share the same moral and ethic values, when it comes to temperaments one
is everything the other is not. Filipe is more creative, flexible and a visionary person, which
has the power to guide and inspire teams, winning their trust and admiration very easily.
Alexandre is more down to earth in his decisions. With a strong academic record, he is more
pragmatic and has a remarkable ability to rapidly analyze scenarios in its entirety, helping
Filipe to materialize his ideas. Both share the desire to achieve increasingly more, to avoid
stagnation and to challenge each other by stretching their own limits a little further. Moreover,
4 Joseph L.Bower in “The CEO Within: Why Inside Outsiders Are the Key to Succession Planning”
5 Oracle, Chipotle and Whole Foods are some examples of companies managed by two CEO’s.